Energy Storage Systems

Silicon Valley Focuses on Storage

Energy is a fundamental essence to modern life. We use it for everything: industry, business, health, education—almost anything we depend on is run through some form of energy.

But without the ability to harness that energy and store it, it would all go to waste.

Energy storage systems are vital to the energy we do possess to ensure that it will always be there when needed. The problem is, there is no sure-fire way to do that—not today, at least.

Silicon Valley, which has been on the cutting edge of the energy industry and was instrumental in building the solar industry, is beginning to change its tune, focusing less on renewable energy that gave such promise in recent memory.

Now, with the tough renewable energy market, venture capitalists (VCs) and private-equity financiers (PEs) are focusing their capital on electricity-grid technology and companies working with energy storage technologies.

Major players Blackstone Group LP (NYSE: BX) and Warren Buffett’s conglomerate Berkshire Hathaway Inc. (NYSE: BRK.A) have paved the way ever since the solar and wind industries took a hit.

Silicon Valley took heed and has set its sights on new technologies that are building more efficient and stronger power supplies.

According to a Bloomberg report, VC and PEs stepped away from renewable energy in 2012; the industry received its lowest contribution in six years, falling 34 percent to $5.75 billion last year.

Investment in the clean energy industry as a whole saw an overall decline of 2.2 percent, or $268.7 billion, and close to a 6.5 percent drop since 2008.

The switch from solar to electricity-grid technology is easily visible as shown by Bloomberg New Energy Finance. Last year, $2.2 billion of clean energy investments from VC/PE funding went to electricity-grid operations, comprising 38 percent of all clean energy funds. Solar stood at just $1.58 billion, reported Bloomberg.

The major problem with renewable energy such as wind and solar at this time is an imbalance of supply and demand. Energy is only generated when there is a breeze or if the sun is shining; often there is too much or too little to supplement the supply and no proper way to store the extra energy created.

This has especially raised issues with wind power and has forced turbines to be shut down when systems can’t handle an overload of wind production. In effect, operations come to a halt and revenues are lost.

But many companies are determined to navigate through the tribulations of the energy storage phenomenon with strong backing from Vcs/PEs.

Next Step Living Inc. and Tendril Networks Inc. are both developing energy efficient software that reduces energy use. Enbala Power Networks is an energy management provider.

And LightSail Energy Inc. is developing energy storage systems that improve the efficiency of compressed air in power systems. The energy storage can be improved from 60% to 90% using the company's concept, reported Clean Technica.

The Bonneville Power Administration (BPA) is working with the first transportable battery storage system on a large scale and has an extended team of scientists and technicians all planning to create storage so that excess energy can be used as needed.

Testing on the battery storage system will stay relatively small-scale for now.

The battery system, developed by Tualatin, Ore.-based Powin Energy, offers a more efficient and economical power converter system than any available in the industry, according to BPA. It's about 85 percent efficient, said BPA spokesman Joel Scruggs -- that is, you can recover close to 85 percent of the energy you put into it for re-use.

It is estimated that the amount of commercial energy storage systems will grow from roughly 900 megawatt-hours where it stands today to over 5,000 megawatt-hours by the year 2022, according to Business Wire.

It is critical that we are capable of capturing and retrieving energy and harnessing it as needed. Right now there are no major breakthroughs that can carry over to large-scale storage and no practical methods that can put energy demands in a harmonious balance.

“Energy storage is sort of the holy grail," Jeff Hildreth, a BPA electrical engineer said in a report by The Columbian. "Ultimately there's no good way to do that right now."

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Energy and Capital does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.

New Report: Nuclear's Worldwide Expansion

The report is yours, FREE. Just tell us where to send it. We'll also sign you up for our FREE Energy and Capital e-mail newsletter where you'll discover the foresight and vision to exploit the stock and investment opportunities of the new energy economy.